The report states that about $701.1 million worth of transactions were recorded during 2017, a considerable jump from the 10-year average of $614 million, with foreign investors making more than half of the purchases.

Savills Associate Director for Research & Consultancy, Katy Dean, said that although the past 12 months had been characterised by a lower volume of transactional activity when compared to 2016, several large-scale institutional-grade assets had been brought to market.

“To a large extent, this is being driven by investor appetite for counter-cyclical investment opportunities located away from the eastern seaboard, particularly in other major cities such as Perth and Adelaide,” she said.

“The significant price difference between Perth and the tightly held markets on the eastern seaboard not only represents various levels of opportunity for investors, but provides some extra buffering relative to the cost of borrowing.”

Savills Perth’s Managing Director, Graham Postma, agreed that the Perth CBD offered “far greater value” for investors than its counterparts on the east coast.

“The value gap in terms of capital values per sqm for A-Grade office has never been greater, with Sydney now more than $10,000 per sqm more expensive than Perth,” he said.

“Perth is now well placed to offer significant growth for investors in the coming years.”

Mr Postma also said that the market yield spread between Perth and the eastern seaboard CBDs was the widest it had been in more than a decade.

“The market yield spread has increased to circa 250 basis points between Perth and Sydney, and 210 basis points between Perth and Melbourne,” he said.

“The real risk in Perth relates to the strength of the office leasing market and the level of confidence that the market has bottomed and begun to recover.

“Savills is of the view that the worst is definitely over and the recovery is now under way, with demand levels improving and limited new supply.

“Effective rents are expected to start to recover, starting at the top end and flowing through to the lower-grade stock over time.”

Ms Dean said that foreign investors had dominated recent activity, accounting for 55 percent of major office investment acquisitions by value in Perth’s CBD office market during 2016 and 2017.

“Throughout the past 10 years, foreign investment has averaged about 25 percent annually, representing a rise in cyclical strategies by foreign investors from late 2015 to early 2016,” she said.

“We saw this cycle start when Cape Bouvard acquired 12 The Esplanade at the tail end of 2015, the same asset they previously owned a decade ago when it was known as Alinta Plaza.”

Significant Perth sales in the past 12 months include 109 St Georges Terrace, the Hatch building at 144 Stirling Street, The Quadrant at 1 William Street and, most recently, 45 St Georges Terrace, formerly known as the Reserve Bank building.